Are you routinely checking the OIG's list of excluded individuals or entities (the LEIE)?

Are you routinely checking the OIG's list of excluded individuals or entities (the LEIE)? If not, it should be part of your regular background check when you hire new employees — and an ongoing check as part of your HME company's corporate compliance procedures. You shouldn't limit the search only to your employees, either. You should also check referring physicians, sales reps and subcontractors.

The law enforcement arm of the Department of Health and Human Services is the Office of Inspector General. Part of the OIG's authority is to exclude individuals and entities from participation in federally funded health care programs, such as Medicare and Medicaid.

Why Is This Important?

When an individual is excluded from participation, it means just that. First, if you hire an individual or entity that has been excluded, and they perform services for Medicare or Medicaid patients, then those claims cannot be reimbursed. The primary effect of exclusion is that no payment will be provided for any items furnished, ordered or prescribed by an excluded individual or entity. Therefore, excluded persons cannot be involved in any part of the process of providing services to Medicare or Medicaid patients.

Even more important, if the OIG feels that you knowingly submitted claims for reimbursement when an excluded individual or entity was involved, you can be subject to civil monetary penalties (CMPs) for doing so. In fact, you can be subject to CMPs just for hiring an excluded person — and the penalties are steep.

A provider can be charged a fine of $10,000 for each claim, as well as three times the amount charged, if the department feels the supplier knew or should have known the person was excluded. Is that a risk you're willing to take? The only way for you to know for sure is to conduct routine checks of the LEIE database.

Further, the OIG has provided guidance to medical equipment suppliers in implementing an effective compliance program. As part of this guidance, the OIG clearly noted that one of the dedicated compliance officer's primary responsibilities is to ensure that all employees and independent contractors have been checked on the OIG exclusion list. I highly recommend not only checking the list but keeping a copy of the search in your employee files. Then, on a regular basis, go back and do follow-up checks.

Another reason checking the exclusion list is so important is because of the government's increased budget for program integrity activities such as audits and health care reform initiatives that have led to an expressed intent on behalf of the administration to reduce improper payments in an effort to remain budget-neutral.

The OIG has several initiatives to ensure compliance with these requirements and has said it "is considering a national initiative to identify and recover payments to entities that collected reimbursement from [excluded] employees." It's important to note that the rules apply even if the exclusion occurred while the individual was working in another health care field and changed professions.

Why Are People Excluded?

There are two types of exclusions: mandatory and permissive. A mandatory exclusion means the OIG is obligated by law to exclude the individual or entity because of a conviction of one of the following offenses:

  • Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other state health care programs;

  • Patient abuse or neglect;

  • Felony convictions for other health care-related fraud, theft, or other financial misconduct; and

  • Felony convictions relating to unlawful manufacture, distribution, prescription or dispensing of controlled substances.

In situations where the OIG has discretion about whether or not to exclude someone, it is called a permissive exclusion. These include:

  • Misdemeanor convictions related to health care fraud other than Medicare or a state health program, fraud in a program (other than a health care program) funded by any federal, state or local government agency;

  • Misdemeanor convictions relating to the unlawful manufacture, distribution, prescription or dispensing of controlled substances;

  • Suspension, revocation or surrender of a license to provide health care for reasons bearing on professional competence, professional performance or financial integrity;

  • Provision of unnecessary or substandard services;

  • Submission of false or fraudulent claims to a federal health care program;

  • Engaging in unlawful kickback arrangements;

  • Defaulting on health education loan or scholarship obligations; and controlling a sanctioned entity as an owner, officer or managing employee.

One of the most common reasons I have seen for physician exclusions is for those physicians who have failed to pay back their federal student loans. It's hard to believe, but if a doctor in your area does this and gets excluded, and then orders equipment for one of his or her patients and you provide it, then that claim is not reimbursable and you can be held liable.

What Else Do I Need to Know?

The OIG has additional authority when excluding individuals, and it is important to know and understand what that is. For example, when an individual is excluded, in some instances their immediate family members may also be excluded. This was done to avoid excluded individuals' transferring the ownership of an entity into the name of a spouse or child in an effort to avoid the exclusion effects.

In addition to the owners of a company or an entity being excluded, the OIG can also exclude officers and managing employees of the company based solely on their position within the organization, even if there is no evidence that they knew or should have known what was occurring that led to the exclusion.

Last, while exclusions can be permanent, they aren't always. Some individuals may be excluded for five years. If you find an employee on the list and the period of exclusion has passed, it's important to know that reinstatement in the program is not mandatory and they must reapply.

OIG exclusions are maintained in a searchable list that is available online at

Author and consultant Wayne H. van Halem, president of The van Halem Group, Atlanta, has worked as a fraud analyst, Medicare fraud information specialist and senior investigator. An Accredited Healthcare Fraud Investigator and Certified Fraud Examiner, van Halem provides counsel to all entities involved in the participation, administration and oversight of public and private health care plans. You can reach him at 404/343-1815 or